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Calculating Pro Rata Holiday Entitlements
Holiday entitlements are calculated based on a number of factors such as the employees start date and their time with the company. For full time employees this can often be relatively simple especially if the entitlement does not increase with length of service.
Calculating Pro Rata Holiday entitlements for Part Time employees can be more complex as you may have to factor in their Start Date, Full Time Equivalent hours (FTE) and the actual days they work in order to get an accurate amount.
There are a number of ways of calculating holiday entitlements for Part Time employees such as spreadsheets or using a basic online calculator that some websites provide. Unfortunately however, these methods often require the re-entering of key information such as Start Dates, contractual hours, actual hours and so on, and this has to be done for each individual employee.
Overview of Holiday Entitlements
Companies can decide how much annual leave an employee is entitled to providing it is at least the legal minimum as determined by the UK Government. Currently, all employees within the UK are entitled by law to minimum of 28 days (or 5.6 weeks) holidays which can include public or bank holidays.
Part Time employees are entitled to a pro-rated amount of the minimum entitlement which is calculated at 5.6 times their usual working week.
For example, an employee working 3 days per week is entitled to 16.8 days holiday (3 x 5.6).
There is no legal obligation for employers to give employees paid leave on Bank Holidays. Employers can determine in the contract of employment that employees have to take bank holidays as annual leave (meaning their entitlement equates to 20 days plus 8 days bank holidays) or 28 days where the bank holidays are included and the employee can take the 28 days whenever they like but maybe required to work on a bank holiday.
To add a further complication, most bank holidays fall on a Monday or Friday. This means that employees who are not contracted to work on Mondays or Fridays will be entitled to proportionately less that and full time employee.
In this situation, Part time employees should be given a pro-rated entitlement to time off in lieu of ban holidays based on the number of hours they work.
Calculating entitlements for employees starting or leaving part way through the year.
When an employee joins the company, their entitlement should be calculated based on their date of join or date of leaving to calculate a proportionate entitlement.
For new starters the entitlement will be pro-rated based on the time worked for the company in the current holiday year.
For leavers the same is true but some adjustment may be required if the employee has already taken more or less holidays than the pro-rated amount once this has been recalculated. This could be in the form of a payment or deduction based on the difference.
How can PeopleFirstHR help?
Whilst you can manually calculate entitlements in a spreadsheet or using the online calculator provided by the Government, this can need some time and effort and may not be the most efficient method.
Additionally, please note that many online calculators bases calculations on a holiday year that begins in January. For companies whose holiday year starts in April the actual entitlement may differ depending on when Easter falls.
PeopleFirstHR enables you to create holiday entitlements based on your company rules. Entitlements are then automatically calculated based on the rule assigned to the employee and many other factors such as their Date of join, Date of leaving, Length of Service contractual hours and so on.
Additionally, the entitlements are automatically adjusted when an employee’s details are updated, for example if they change their hours part way through the holiday year.
If you would like to find out more how PeopleFirstHR can save you time calculating your pro-rata holiday entitlements then please get in touch.